After much debate I decided to go with a Kindle. When I saw that the NOOKcolor was out I became intrigued.
What I'm wanting to know is people's opinions on e-ink vs and LCD screen and would you go with the color screen of the Nook over grayscale e-ink of the Kindle. Personally I think that the Kindle would be much better for extended reading. That is why I decided to go with a dedicated device for reading over the iPad.
If what you are reading is linear (like fiction), nothing comes close to the Kindle, esp. the Kindle 3 (smaller, better contrast). Color e-ink is still a ways away. Right now, I'm impressed with the improvements in contrast. That's what's really important anyway for a dedicated eInk reader since in the future color books and such will probably be purchaseable on Kindle (or iBooks or Google or Nook) and viewable on a computer.
For non-fiction and reference books, the Kindle takes second fiddle to something like an iPad simply because the screen updates are slow. (Of course, nothing stops you from reading the Kindle app on the iPad). So it really depends on what you read and how much. For instance, the New Yorker on my Kindle works great, but most other magazines I prefer Zinio on my iPad.
As for me, I gave up my Kindle simply because I have an Air and iPad. I found that I only carry one device in the tablet size (iPad or Kindle) and one in the notebook size (MacBook Pro or Air) and one handheld gadget (iPhone). Different strokes for different folks. After all, I have a friend who found the Samsung Galaxy Tab pocketable.